USD/FOMC – The dollar strengthened across the board on Wednesday, after the FOMC cleared the way to reduce its monthly bond purchases and signaled interest rate increases might follow more quickly than initially expected.
Reuters noted that “the moves, which were included in the Fed’s latest policy statement and separate economic projections, represent a hawkish tilt by a central bank that sees inflation running this year at 4.2%, more than double its target rate, and is positioning itself to act against it.”
While CFRA Research concluded that “It’s probably a little bit more hawkish than many would have anticipated basically acknowledging that should the economy continue to grow as we have seen it would warrant a tapering to occur. You could say it’s a tentative tapering announcement even they did lower their 2021 GDP forecast.”
Reuters noted that “the moves, which were included in the Fed’s latest policy statement and separate economic projections, represent a hawkish tilt by a central bank that sees inflation running this year at 4.2%, more than double its target rate, and is positioning itself to act against it.”
While CFRA Research concluded that “It’s probably a little bit more hawkish than many would have anticipated basically acknowledging that should the economy continue to grow as we have seen it would warrant a tapering to occur. You could say it’s a tentative tapering announcement even they did lower their 2021 GDP forecast.”